Exploring Farmers’ Expectation toward Farm-Gate Price of Rice in Japan by Positive Mathematical Programming

Abstract

Positive mathematical programming (PMP) has a substantial number of applications in the field of agricultural and resource economics. Their focus has often been placed on the simulation analysis of farmers’ response to drastic changes in exogenous factors especially brought about by policy changes. In the present study, an exploration was made to widen the application area of the PMP approach, targeting farmers’ expectation toward the farm-gate price of rice in comparison with that of wheat under the policy to suppress overproduction. When domestic consumption is mature and the regulation of production by the government is present, farmers’ expectation toward the farm-gate price of a crop can be assumed to fall in response to an increased allocation of land area to produce the crop. The degree of the fall is defined as the expectation fall index (EFI) in the present study. A proposition was made as to the procedure for quantifying EFI using the PMP approach with statistical datasets of multiple years retrieved from the Ministry of Agriculture, Forestry, and Fisheries. The present study is considered to have provided a basis to discuss the formation processes of farmers’ attitudes toward policy measures.